How the Mighty Have Fallen! Digg Bought for a Mere 1/2 a Mil

Digg was once the “darling” of bidders and potential buyers, there was a time that it was being considered for sale at $200 Million in 2008 by suitor Google. Now, after alienating its uswers and changing itself so much that no one wanted to use it, it is being sold for a mere 1/2 million.

Once a Social Media Star, Digg Sells for $500,000

“Digg Inc., a social-media pioneer once valued at more than $160 million, is selling for the deeply discounted price of about $500,000, three people familiar with the matter said.

The buyer is New York technology development firm Betaworks, which is attempting to revive a news-sharing site that was outmaneuvered by Facebook Inc. FB -0.52% and Twitter Inc.

Digg confirmed Thursday it sold its brand, website and technology to Betaworks. The price is a pittance for a company that raised $45 million from prominent investors including Facebook investor Greylock Partners, LinkedIn Inc. LNKD +3.40% founder Reid Hoffman, and venture capitalist Marc Andreessen.

Digg received higher offers from bidders that included technology and publishing companies and start-ups but ultimately decided Betaworks had the best plan for reviving its brand, these people said. In May, Washington Post Co. hired 15 members of Digg’s engineering team—more than half of the company’s overall staff—for its SocialCode digital media subsidiary.

Betaworks is acquiring a website that still has a well known brand and sizable audience of more than 7 million visitors per month as of May, according to comScore.

Digg was once one of the most promising start-ups in Silicon Valley. The website was founded in 2004 as a way for consumers to put together their own collections of news and other Internet content, rather than relying on the choices made by newspaper editors.

Digg users would post links on the site’s home page, then others would vote on their choices, determining the prominence of the stories they posted.”